Finance MCQs

Page No. 27

Coupon payment of bond which is fixed at time of issuance____________?


aRemains same


bBecomes stable


cBecomes change


dBecomes low


View Answer Remains same

Market in which bonds are traded over-the-counter than in an organized exchange is classified as__________?


aOrganized markets


bTrade markets


cCounter markets


dBond markets


View Answer Bond markets

Reinvestment risk of bond’s is usually higher on______?


aIncome bonds


bCallable bonds


cPremium bonds


dDefault free bonds


View Answer Callable bonds

Bonds that can be converted into shares of common stock are classified as_________?


aConvertible bonds


bStock bonds


cShared bonds


dCommon bonds


View Answer Convertible bonds

Rate on debt that increases as soon market rises is classified as________?


aRising bet rate


bFloating rate debt


cMarket rate debt


dStable debt rate


View Answer Floating rate debt

When price of bond is calculated below its par value, it is classified as___________?


aclassified bond


bDiscount bond


cCompound bond


dConsideration earning


View Answer Discount bond

Bonds with deferred call have protection which is classified as__________?


aProvision protection


bProvision protection


cDeferred protection


dCall protection


View Answer Call protection

Real risk-free interest rate in addition with an inflation premium is equal to_____________?


aRequired interest rate


bQuoted risk-free interest rate


cLiquidity risk-free interest rate


dPremium risk-free interest rate



Stated value of bonds or face value is considered as_____________?


aState value


bPar value


cBond value


dPer value


View Answer Par value

A bond whose price will rise above its face value is classified as________?


aPremium face value


bPremium bond


cPremium stock


dPremium warrants


View Answer Premium bond

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